The announcement comes to materialize the thesis that has been expected for months, which is why the markets did not react with abrupt changes to the increase in interest rates by the U.S. Federal Reserve. FED. The agency still reiterates that the priority is to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. the inflationary levels that weigh on the local economy.
La US Federal Reserve (FED) The U.S. Federal Reserve, the body responsible for the monetary policies of the North American nation, announced today a new increase in interest rates, which will rise again by half a percentage point as had been anticipated in previous opportunities.
FED interest rates rise again
This was announced today by the president of the FED, Jerome Powell, who made the corresponding announcements at a press conference today, revealed that in addition to the half percentage point increase in interest rates, the agency will also continue to reduce its portfolio a collection of cryptocurrencies or crypto assets held by an investment company, hedge fund, financial institution or individual. of assets starting by allowing bonds to mature without reinvesting the proceeds in new securities, rather than selling them on the open market.
On inflation and the measures, Powell commented:
“Inflation is too high…it is essential that we bring inflation a general increase in prices and fall in the purchasing value of money. down if we are to have a sustained period with strong labor market an area or arena, online or offline, in which commercial dealings are conducted. conditions that benefit everyone.”
As commented in previous editions, the announcements made by the FED today go hand in hand with Powell’s remarks during a meeting for the International Monetary Fund (IMF) held last April, where he revealed that the organization he presides would be considering raising interest rates even more, as he commented at the time:
“I would say there will be 50 basis points on the table for the May meeting…We really are committed to using our tools to get back to 2% inflation.”
La meta es reducir la inflación
One of the areas of concern for many analysts is the growth in inflation rates since the COVID-19 pandemic began in 2020, which has put the U.S. government in the need to print even more dollars to fund primarily social programs to address the consequences of this situation for many families.
Let’s keep in mind that a recently released report put inflation rates for the US at over 8.5%, the highest levels seen in the last 40 years. At the time, Powell called the measures taken by the U.S. Federal Reserve the FED como “absolutely essential to restore price stability.” he added:
“We’re really going to raise rates and quickly get to levels that are more neutral and then that are really tight … if that’s appropriate once we get there.”
The reaction of the markets
In contrast to what we have seen on other occasions, following the announcements of the FED various indices reveal that equity equity is the funds that would be returned to a company's shareholders if all of the company's assets were dissolved and all debts were paid off in the event of liquidation. markets have remained virtually unchanged.
The rate of Dow Jones shows a slight increase of 0.4%; S&P 500 shows no noticeable changes; while NASDAQ is down by 0.5%.
Called aggressive by some but much needed by others, it appears that the 0.5% interest rate hikes seem friendly enough for U.S. businesses and residents. Analysts say the FED would not dare to decree an even larger increase, although this may change change — a concept relevant to cryptocurrencies that use the UTXO model — is the number of coins sent back to a user after they use their unspent outputs to initiate a transaction. depending on the performance of the economy and the evolution of inflationary indices.
As for the crypto sector, it could be said that the markets of the main cryptocurrencies reacted positively after the announcement. Take for example the cases of Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. and Ethereum, the most reputable exponents of the sector, which rose by more than 3.1% and 1.8% respectively. However, it remains to wait and see what the longer-term effects will be amid the uncertainty shaking the ecosystem in general.
- Bloomberg report highlights that Bitcoin is becoming a risky asset with increased demand
- El Salvador’s Bitcoin Bond is still on hold: “There are no conditions,” says minister
- MicroStrategy plans to continue its pro Bitcoin strategy and is open to other revenue generating opportunities.
Version by Angel Di Matteo / DiarioBitcoin
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